Intergenerational Economic Mobility and the Racial Wealth Gap
- (pp. 206-10)
Abstract
A growing body of research documents the importance of wealth and the racial wealth gap in perpetuating inequality across generations. We examine the impact of wealth on child income. Our two-stage least squares regressions reveal that grandparental wealth has an important effect on the younger generation's stock, which in turn affects the younger generation's household income. We further explore the relationship between income and wealth by decomposing the child's income by race. We find that the intergroup disparity in income is mainly attributable to differences in family background. These findings indicate that wealth is an important source of income inequality.Citation
Toney, Jermaine, and Cassandra L. Robertson. 2021. "Intergenerational Economic Mobility and the Racial Wealth Gap." AEA Papers and Proceedings, 111: 206-10. DOI: 10.1257/pandp.20211113Additional Materials
JEL Classification
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D31 Personal Income, Wealth, and Their Distributions
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- J62 Job, Occupational, and Intergenerational Mobility; Promotion